Coal India Ltd (CIL) has extended the date of commencement of Tranche-IV coal linkage auction for Sponge-Iron sector by 7 days, which was earlier expected to commence from today i.e., from 19 Jun’18.
The said auction will now begin from 26 Jun’18 and stretch for the next 15 working days till 13 Jul’18. The coal company has offered a total quantity of 7,271,000 MT in the coal linkage through 45 lots, which are scheduled for auction in three slots per day.
Earlier in May’18, CIL had invited interested bidders to get themselves registered on the MSTC’s website for the Tranche-IV linkage auction. After a pre-bid meet, the company had finalised the modalities for the linkage auction for sponge iron sub-sector, which is likely to be followed by a series of linkage auctions for various Non-regulating sub-sectors (NRS) such as Cement, Captive power plants (CPP), ‘Others (non-coking)’, Steel (coking) and ‘Others (coking)’.
Among the total coal proposed for Sponge Iron sub-sector, largest coal quantity has been offered from SECL (3,00,000 MT), followed by MCL (2,058,000 MT). No coal has been offered from NECL, out of the 8 subsidiaries of CIL.
The Coal linkage auctions not only ensures coal supplies for a longer time interval, but also are cost-efficient than the spot coal auction scheme of CIL.
The tenure of the FSA (Fuel Supply Agreement) under linkage auction is 5 years which can be further extended by another 5 years on mutual consent.
Moreover, the base price for coal in the linkage auction is set the same as the notified price for Non-power sector, while in case of spot auction; base price of coal is set 20% higher than the notified price for non-power sector. However, an addition charge of INR 90/MT as Beneficiation charge is added to the notified price for coal that is offered from WCL, as per the extant practice.
In the three tranches of coal linkage auction concluded till date, sponge iron sub-sector has booked the second-highest coal quantity among the various non-regulating sectors. Out of the total 45.18 MnT coal booked in the three tranches, sponge iron sector has booked 8.88 MnT coal, thereby yielding a gain of 7.55% over the notified price.
Click here for detailed schedule of Linkage Auction for Sponge Iron sub-sector
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